It’s been more than five weeks since Harrisburg Receiver David Unkovic quit, but the financial recovery plan Unkovic developed for the city continues to move forward, seemingly unimpeded by his departure.

Robert Philbin

State Department of Community and Economic Development official Fred Reddig, tapped to temporarily oversee the receiver’s office until Gov. Tom Corbett names Unkovic’s replacement, continues to implement the plan. He said the state still intends to start leasing and selling the city’s assets, as called for in the plan, by mid-June.

But should — and can, legally speaking — the state proceed with the plan without a receiver to lead the way?

City Council member Brad Koplinski and council attorney Mark Schwartz said work on the plan should have ground to a halt the day Unkovic resigned. Harrisburg Mayor Linda Thompson disagreed, saying the city’s fiscal recovery will not wait for a receiver.

The state takeover law, Senate Bill 1151, adopted after the emergency status was declared, gives only the receiver the right to lead the city’s fiscal recovery, not DCED, Schwartz contends.

“If there is a vacancy, it’s clear that [Corbett] appoints another [receiver]. It doesn’t say it can be done on an interim basis from the executive branch. The receiver is not part of the executive branch. He is not part of DCED,” he said. “I want a hearing on these issues.”

DCED spokesman Steve Kratz said, however, that the fiscal emergency declaration the state issued for Harrisburg last October gave the state the right to continue managing the city’s finances without a receiver.

Unkovic resigned March 30, saying political and ethical problems with the fiscal recovery process prevented him from developing a fair plan for Harrisburg.

In turn, Corbett tapped DCED to oversee the receiver’s office until he names a new receiver.

For now, the governor is pushing forward with the plan until a new receiver is named so the city can continue recovering, Kratz said.

Corbett likely will not name a new receiver by Friday, but will be prepared to tell the court when he expects to, said Kelli Roberts, a spokeswoman for the governor. She would not say who the governor is considering, but said Corbett is working quickly to name a new receiver.

The court, which is overseeing the city’s financial recovery proceedings and will confirm the receiver appointee, also wants to know where Reddig is in implementing Unkovic’s plan, which aims to pay down Harrisburg’s more than $317 million of incinerator debt and close its budget gap.

Koplinski said the council is looking for similar answers. The council will not adopt any of the plan’s mandates until it finds out who the governor plans to name as the next receiver and where the plan stands at that point, he said.

“We think it’s a very serious problem that there is no one truly running the recovery plan,” he said.

The city has to continue operating, so it’s not as simple as stopping the recovery plan at once when the receiver stepped down, said Neil Grover, founder of community watchdog group Debt Watch Harrisburg.

Still, solving the city’s debt crisis also will take accountability, Grover said. Business owners and potential home buyers will not want to invest in the city if they see a debt crisis washed over without finding out who is responsible and why.

“It’s hard to convince anyone to invest in the city without some accountability. How could they trust that the public trust would operate in a way that would not hurt them?” Grover said. “You can’t keep from functioning because the receiver is not there. It would be the same question if the mayor resigned and walked away. That doesn’t mean that you just stop the business of government.”

And the state isn’t going to sell or lease the city’s assets overnight, she said. In fact, even though Reddig said the state would follow the same timeline Unkovic set, no negotiations for city assets are under way, Thompson said.

“The plan doesn’t say that if there is a receiver who abruptly leaves, we should stop the presses,” she said. “This is no longer Dave Unkovic’s plan. It is a court-ordered plan, and the plan calls for us to move forward.”

Unkovic’s resignation is exactly why the court should hold a hearing before a new receiver is appointed and confirmed, Schwartz said.

If it doesn’t, the next receiver might run into the same problems Unkovic faced, he said. Schwartz has even threatened to apply for a subpoena to force Unkovic to testify in court about why he stepped down.

“I want a hearing on why Unkovic quit. I want him in the hearing. I want him to produce paperwork regarding why he resigned,” Schwartz said. “By virtue of the words [Unkovic] said to the court in his resignation letter, he cast a shadow over everything that he did.”

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